Real vs Personal Property - Cost Seg and Capitalization

[Eric Williams]

Another thing I thought I would mention in regards to cost segs is they generally increase the amount of tangible personal property, which is really anything but real property and intangible property.

The definition of real property is defined in the regs of 48.

That section is repealed but it's still used and reference in the regs of 167.

1.48-1

For purposes of this section, the term “tangible personal property” means any tangible property except land and improvements thereto, such as buildings or other inherently permanent structures (including items which are structural components of such buildings or structures). Thus, buildings, swimming pools, paved parking areas, wharves and docks, bridges, and fences are not tangible personal property. Tangible personal property includes all property (other than structural components) which is contained in or attached to a building. Thus, such property as p machinery, printing presses, transportation and office equipment, refrigerators, grocery counters, testing equipment, display racks and shelves, and neon and other signs, which is contained in or attached to a building constitutes tangible personal property for purposes of the credit allowed by section

(e) Definition of building and structural components.

(1) Generally, buildings and structural components thereof do not qualify as section 38 property. See, however, section 48(a)(1)(E) and (g), and § 1.48–11 (relating to investment credit for qualified rehabilitated building). The term “building” generally means any structure or edifice enclosing a space within its walls, and usually covered by a roof, the purpose of which is, for example, to provide shelter or housing, or to provide working, office, parking, display, or sales space

I point that out because if you don't have a lot of personal property under 20 years how are you going to accelerate? Or if you do but it's not worth a lot. 

Consider actually waiting a couple year and see how things are going. If you have a solid level of income, you can always amend.